BOSTON (CBS) – Some of you are out shopping today and you may have the kids with you in the car. As harried as you are right now why not give the kids a money lesson? If you get them alone in the car and you can get them to turn off their electronics you could have a captive audience.

Kids need to understand money and how we as adults get it into our hands. Tell a small child that you have no money to buy something and she will suggest charging whatever it is she wants.

Kids also think that money comes from the ATM. Most kids have never been inside a bank, just the drive through or the ATM machine. And worse, they think ATM stands for Always Taking Money.

Kids need to understand the concept of working for money, getting paid for that work and depositing a paycheck into the bank for safekeeping. This gives us the privilege of going to the ATM to make withdrawals of our money so that we are able to purchase goods and services. Most 6-year-olds are able to grasp this concept.

A harder concept is charge cards and how they work. These are just short-term loans that we get when we use our credit card. If we pay it off each month, no interest is charged. The card is our form of identification to show the merchant that the credit card company has money set aside that we can borrow to make our purchases.

Teaching kids about delaying gratification is also important. We’ve all witnessed a kid throwing a tantrum in a store and then getting what he wanted. For starters, have the kid begin to save for something they want like a game, a Barbie, or a Zoomer. Offer to match their savings or to loan them the money charging them interest.

Take whatever opportunities come up to make your kids money smart.


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